Foreclosures driving record gains in existing-home sales
On the one hand, the National Association of Realtors is reporting big gains in existing home sales for October (the latest figures) and credits first time buyers rushing to take advantage of the tax credit which has now been extended into next year. Inventories continue to shrink. All good. This now concludes the glass half full portion of this post.
If you look down -- far down -- the news release pumped out by the NAR, you will see something else: So-called "distressed properties" (which conjures up an image in my mind of a house, all by itself, phoning some shrink and asking for prescription meds to battle its depression) account for some 30% of all the October sales.
Distressed properties, of course, are foreclosed properties. This is a reflection of the still never-ending wave of foreclosures that shows no sign of abating anytime soon. Plus, because we are talking distressed properties here, we are also talking about a continuation in the slide of housing prices; with the national median existing-home price now at $173,100, which, says the NAR, is down 7.1% from October of 2008. This is all the glass is half empty portion of this post.
Of course, if you happen to be lucky and still have a job and something that from a distance looks a bit like a good credit score, then this might be a great time to take advantage of some real bargains out there.
But building up a nation's economy on the backs of foreclosed homeowners strikes me as not a very good long-range game plan and, to be honest, has a Charles Dickens feel to it now that the holiday season is upon us.
Charles Feldman is a journalist and media consultant and co-author of the book, "No Time To Think -- The Menace of Media Speed and the 24-hour News Cycle."